Litigation Release No. 21106 / June 25, 2009

Accounting and Auditing Enforcement No. 2999 / June 25, 2009

SEC CHARGES FORMER DVI, INC. EXECUTIVES WITH FINANCIAL FRAUD

The United States Securities and Exchange Commission announced that it has filed a settled civil action in the United States District Court for the Eastern District of Pennsylvania against Steven R. Garfinkel (Garfinkel) and Michael O’Hanlon (O’Hanlon) for their participation in a financial fraud. This caused the collapse of DVI, Inc. (DVI), a specialty finance company that loaned money to small healthcare service providers for the purchase of high-end medical equipment. The Commission’s complaint alleges that over a period of four years, Garfinkel, DVI’s former Chief Financial Officer, and O’Hanlon, DVI’s former Chief Executive Officer and President, used fraudulent means to conceal the company’s liquidity crisis from investors and to fraudulently obtain additional funding from its commercial lenders. Without admitting or denying the Commission’s allegations, Garfinkel and O’Hanlon consented to settle the action.

According to the Commission’s complaint, Garfinkel and O’Hanlon engaged in a fraudulent scheme to obtain additional funding from DVI’s commercial lenders by pledging collateral that did not meet the quality-related criteria specified in the loan covenants. In addition, Garfinkel and O’Hanlon manipulated paperwork to enable DVI to double pledge collateral and sent DVI’s commercial lenders false monthly reports to make it appear that there was adequate and appropriate collateral securing DVI’s lines-of-credit. Garfinkel and O’Hanlon concealed the fraudulent scheme from investors by knowingly filing false and materially misleading Commission reports and issuing false and materially misleading press releases. In furtherance of their scheme, Garfinkel and O’Hanlon also aided and abetted DVI’s filing violations by knowingly falsifying or causing others to falsify certain books and records, circumventing internal controls and misleading DVI’s auditors.

By engaging in the conduct described in this Complaint, Garfinkel and O’Hanlon violated Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 13b2-1, 13b2-2 and 13a-14 thereunder and aided and abetted DVI’s violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. Garfinkel and O’Hanlon have agreed to the entry of a Final Judgment that permanently enjoins them from further violations of the relevant provisions of the Exchange Act and prohibits them from acting as officers or directors of a public company.

On November 17, 2006, the United States Attorney’s Office for the Eastern District of Pennsylvania filed an Information against Garfinkel charging him with violations of 18 U.S.C. §§ 1341 (mail fraud) and 1350 (false certification of financial reporting) of the Sarbanes Oxley Act. On March 28, 2007, Garfinkel pled guilty to violations of these provisions, was sentenced to 30 months incarceration and was ordered to pay restitution of $51 million. Garfinkel is currently incarcerated.